Posted in Finance, Accounting and Economics Terms, Total Reads: 1001
Definition: Cashier’s Check
These are the checks issued by the financial institution as a guarantee of payment to the payee. It can be defined as a draft guaranteed by the bank, uses bank’s funds (i.e. after transferring from payers’ account)
They are generally issued by banks when requested by the payer (who is an account holder) to the payee. They are used to make sure that the payee gets paid. Personal checks might bounce if there is no required amount in the payer’s account. To avoid this and to secure the transaction, a cashier’s check is used.
If a cashier’s check is issued, funds are transferred from the payer’s account to the bank’s account. Hence, the payee can be confident that he would receive the amount without any discrepancies. Usually, a premium fee is charged to the payer to avail this option.
In case the payer does not have a bank account, then he can take the cash and the necessary information. Once the cash is given at the bank, a cashier’s check is issued.
• Safe and secure when compared to personal checks
• In case of Personal checks, amount is deposited only after the check is cleared, which might take time. With cashier’s checks, funds are immediately available
A cashier’s check is similar to a money order. In case of small amounts, a money order is preferable because they charge a lesser premium than the cashier’s check.